As we look ahead at 2021, while still in the midst of a global pandemic, it is important to take stock in how the retail community has been forced to rethink, and often reinvent, their business operations, their physical spaces and ultimately their customer relationships.  In light of this, what are the key retail trends for commercial real estate professionals to consider that will shape the market going forward?:

1.  The Strong Are Surviving: Retailers who were expanding prior to, and during, the COVID pandemic, are continuing to add new locations in the market.  This is directly attributable to the financial health of these companies going into the pandemic, which aided their efforts to expand their market shares, ongoing.  Some examples, who are TRUE clients, would include: Old Navy, Athleta, Panera Bread, Chick-fil-A, Choice Pet; all with strong, loyal customer bases.

2.  Technology Reinvention: Retailers who have incorporated technology into their operations will continue to fare better than those who have not.  This trend makes sense, as it gives retailers new potential options for engaging with their target audiences and can lead to greater convenience and higher customer satisfaction. Here, digital integration can take the form of: making e-commerce platforms seamless with existing ‘bricks and mortar’ operations, restaurant apps that facilitate mobile orders, curbside pick-up options, and more frequent digital interactions with key customers, in general.

3.  “Shopping Anchors”: Well-tenanted shopping centers in strong retail markets continue to get the most activity (i.e. tenant interest), when it comes to smaller spaces.  Here, many tenants that are expressing interest in these locales, are service-oriented and/or food operators.  To be sure, within this ‘anchoring trend’ there seems to be a flight to quality in regional markets, where tenants are looking to relocate into the prime shopping centers, where relative foot traffic has remained strong even during the pandemic.

4.  Small Can Mean Nimble: Junior anchor and big box expansions continues to lag small retailer activity.  Here, we expect to see more consolidation in this category as e-commerce continues to grow double-digit percentages, while bricks and mortar sales are comping at single digit percentages.  Who knows how enduring this trend will be once the pandemic abates, but clearly the market dynamic has shifted, and retailers need to plan accordingly.

5.  Back Half Boom!: We assume that retail sales will pick up significantly in the 3rd and 4th quarters of 2021, as COVID cases decrease with the onset of greater vaccine distribution.  Further, because retail strength is often coincident with a strong housing market, we also can expect a heavy influx of home buyers from NYC metro markets, relocating to more distant suburbs, and resulting in a retail sales boost in the process.